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Retrospective tax law is bad, says professional

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‘Section 38 on Deemed Assessed Value could infringe on tax payers’ rights’

by Sanath Nanayakkare

Speaking at a Webinar held on the 2nd June 2021.on “Recent Amendments to the Inland Revenue Act” Shamila Jayasekara Partner – Head of Tax & Regulatory said that in principle, retrospective tax law was bad as it could have negative consequences on the concluded transactions of businesses.

Sharing her concerns and views on the topic she said,” A lot of changes made to the tax code are incentives provided through the form of tax exemptions, the concessionary rate being applied to a large number of sectors, the qualifying payments allowed and expanded, the withdrawal of withholding taxes, the expansion of deductible tax expense”.

“Those were the plus factors of the tax proposals to give relief to businesses. Now, they are retrospective. Some of the agriculture tax excemptions come in from April 2019 and the others from January 2020. so we need certain clarifications and guidelines to be issued by The Inland Revenue Department fast, so we can implement them during this month. Then as practitioners, we can amend returns that have already been submitted and filed.”

“Another area I want to bring is another area is; there were certain changes that were done which were not budget proposals and which were not announcements in press statements either with retrospective effect going back to April 2018. Now in principle, I think retrospective tax law is bad, but in circumstances when certain incentives were given and published, then of course you become aware of these changes though the law may not be there. But it should not hit you as a surprise when you read the tax amendments because these have consequences to concluded transactions of businesses. I don’t think it is positive from the tax side where you suddenly find you have concluded a transaction and then you find the tax law has changed with retrospective effect. What has happened has happened but it should not happen. I understand that even in the current amendments there are gaps. If you take concessions given to SMEs, I think there is a bit of doubt as to what an SME is. I understand these changes and I know that the policymaker can change those, but those should be done prospectively. It should not be a retrospective change because tax law is a fiscal law and no one would know the thinking behind policies ,so you go on the wording of the law, therefore, any change should be prospective’

“Further, the introduction to section 38 of a deemed assessed value on the realization of investment assets; you are to consider it on the market or an assessed value or the value given by a valuer.. But if the commissioner is of the view that is not reflective of market value then he can determine an alternate value. I think that gives a lot of room for arbitary valuations and a lot of disputes. With regard to this section, there is no penal code either because the law empowers the determined value to be accepted as the assessed value. That will of course infringe on the tax payers rights,” she said.



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Farmchemie becomes the first Sri Lankan owned company to receive FAMI-QS certification

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Farmchemie has obtained FAMI-QS certification being the first Sri Lankan owned company certified with FAMI-QS. FAMI-QS stands for Feed Additive and pre-MIxture Quality System, which compromises the safety of animal feed and the quality of processed goods in accordance with European regulation no. 183/2005 on animal feed. Farmchemie is a BOI approved leading manufacturer and exporter of animal feed additives and nutritional supplements in Asia. Farmchemie is equipped with a state-of-the-art manufacturing facility from Bühler, Switzerland to offer quality assured manufacturing services for world-renowned European brands as well as own brands under Farmstar. Farmchemie has already established their presence in numerous international markets such as India, Bangladesh, Nepal, Kuwait, Lebanon, UAE, Egypt, Thailand, Vietnam, Malaysia, Mongolia, Cambodia and Uganda. FAMI-QS will enable them to expand their markets including the European and USA.

“We are honoured to announce that Farmchemie becomes the first Sri Lankan-owned company to be certified with FAMI-QS in combination with ISO 9001: 2015 and Good Manufacturing Practices certification for animal feeding. By attaining FAMI-QS, we are able to anticipate the expectations of our clients for safe, high-quality goods by lowering the related risk and enhancing the quality of onsite feeds via a supply chain that is properly guaranteed. For that Farmchemie implements measures for Feed Fraud and Feed Defense according to FAMI-QS supply chain integrity module V2. We would like to express our heartfelt appreciation to our customers and suppliers for their continued support and dedication. We look forward to elevating the firm to new heights in the coming months and years, as our aims will always be centered on quality assurance and innovative manufacturing.” Managing Director Uditha Wanigasinghe stated.

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Exports Gold Award for Textrip

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Textrip Pvt Ltd, the export arm of the Elasto Group, was recently recognized, as the gold award winner for rubber and rubber-based products, medium scale category at the NCE Export Awards ceremony held recently in Colombo. The Chairman and Managing Director of Elasto Group, Mangala Gunasekera accepted the award at the gala event held at Shangri La Hotel. The national export awards ceremony, organized by the National Chamber of Exporters (NCE), recognizes and rewards Sri Lankan exporters on their performance in the international market.

“We always strive to manufacture high-quality rubber-based goods, using the latest technology, adhering to the highest international standards, and showcasing Sri Lanka on the global stage. I would like to thank our clients, locally and internationally for their continuous trust and my staff for their hard work and dedication. They are the pillars of our success,” Managing Director of Elasto Group, Mangala Gunasekera stated. Textrip products have obtained a number of national and international quality standards such as ISO 9001:2015, ISO 14001:2015, CET, REACH and their products are designed to adhere to the ‘Wellness Wisdom’ theme. The company works with over 100 top sports and wellness brands and exports to more than 30 countries including European countries and the United States. TEXSTRETCH Progressive Exercise Resistance Bands is one of the most popular products of the company. The product is a great full-body workout solution for users of any level.

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Sri Lanka Tourism returns to Spanish market after pandemic

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Spain is one of the fastest recovery markets for Sri Lanka Tourism after the pandemic and participation in FITUR argues well for the much-needed exposure for Sri Lanka as an attractive tourism destination for Spanish-speaking countries, contributing in a substantive manner to its overall growth strategy. Sri Lanka Tourism made the presence with the 28 private sector companies at 43rd edition of FITUR International Travel Mart which was held from 18- 22 January 2023, Madrid, Spain. FITUR is the largest tourism event in the Spanish Market where all the sectors leisure, business and MICE tourism meet under one roof.

Sri Lanka Tourism stall was ceremonially opened by Mr.Chalaka Gajabahu ,Chairman of Sri Lanka Tourism Promotion Bureau and Honorary Consul of Sri Lanka in Barcelona, Mr. Agustin Llana and representatives of the leading private sector members of Sri Lanka.

Sri Lanka was able to attract high level of attention from the trade and travel visitors attended at the event. The Sri Lanka pavilion highlighted many aspects of its potential culture, beauty, Ayurveda and many more which Sri Lanka would offer as a tourism destination. Sri Lanka stand optimized the “So Sri Lanka” and “Visit Sri Lanka” vivid sights to attract the potential visitor segments. At the Sri Lanka pavilion, Ceylon tea was served for the visitors with a view of promoting Ceylon tea in the Spanish market.

On the sideline of the FITUR travel fair, Sri Lanka Tourism Promotion Burau officials participated at the events organized by the UNWTO. During the events, SLTPB officials met with the Mr.Harry Hwang , Director of Regional Department for Asia and the Pacific, UNWTO.As a result of discussions, Mr.Harry Hwang has shown the interest to hold the UNWTO Joint commission in Sri Lanka in 2024.

Meantime, the SLTPB and Sri Lanka Embassy of France also took steps to arrange Business Meetings, exclusive media interviews, Air Line meetings at the FITUR 2023. The Media gathering conducted during the fair created the great opportunity to highlight the updates on the destination and create awareness on the destination.

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